A number of years ago, there was a bill proposed that would require a 2/3 majority vote for the legislature to approve any tax increase. During the debate way back then, Rep. John Edmonds (R-Great Bend) took to the floor with an amendment. He told his fellow legislators that this would be such a good idea, he wanted to apply the rule to all votes – nothing could become law without a 2/3 majority. Edmonds argued that if something was a really good policy, it ought to be easy to get 2/3 of one’s colleagues to agree.

The 2/3 majority bill did not pass. And Rep. Edmonds made some very good points that should speak to us as we watch this legislature, the 2014 legislature and future legislatures.

In 2014, the school finance bill that eliminated due process for teachers and enacted a $10 million corporate give away voucher program was passed by 63 votes in the wee hours of the morning after a long call of the House. Just like the tax bill in the 2015 session.

If one’s policy can only garner the minimum 63 votes after 3:00 am when legislators have been locked in the chamber, bullied, threatened, and sleep deprived, does one really think it’s a good policy?

We do not advocate for a 2/3 majority rule. But we question the benefit of policies that can only get to the minimum vote necessary after bully tactics are implemented. If the Legislature can’t get to a majority on the merits of the argument, then perhaps they shouldn’t.

Tax Policy

Majority rules.

That’s true. And in the House a majority is 63; in the Senate it is 21. Often under the dome people speculate on “what will get 63 and 21.”

That was certainly the way things worked with tax policy this year.

What was known coming into the session last January and became more clear with every revenue report moving forward was that the state was in dire straits when it came to revenue.

The tax plan passed in 2012 at the command of Governor Brownback – his “real live experiment” – three years later has proven to be a failed experiment. And yet the Governor and his cronies hold on to it with a death grip.

Both chambers split into multiple camps when it came to tax policy changes. Democrats and moderate Republicans saw no benefit to helping pass a plan that balanced the budget on the backs of working people and left the worst parts of the Brownback plan in place. Center-right Republicans wanted to spread the pain of a tax increase, bringing businesses back on the tax rolls and increasing consumption taxes. Brownback supporters opposed bringing businesses back on the tax rolls but were happy to enact a large increase in sales and other consumption taxes like cigarettes, gasoline, and liquor. And then there was the hard core right. This group opposes all tax increases all the time and insists that the budget should just be cut.

The governor vowed to veto any bill that imposed taxes on the 330,000 Kansas businesses that his 2012 plan exempted or rolled back his “glide path to zero” plan to end the income tax entirely. He and his budget director Shawn Sullivan threatened to strike out post-secondary education funding, cut nearly $200 million from K-12, reduce social services, and lay off public safety personnel if the legislature did not balance the budget with consumption taxes only.

The legislature repeatedly fought back, bringing plan after plan to the floor and watching them go down in defeat. As the governor and House leadership tried to force legislators to adopt bad tax policies, they even suspended a call of the House for eight hours, keeping a vote in limbo over night.

As the session dragged on, more and more legislators checked out. Whether for vacations or returning to work, attending weddings, or dealing with family emergencies, numbers thinned out over the last couple of weeks.

In the end, as the last tax plan came to the House floor, it appeared to fail having gained only 61 votes. And that’s when the doors were locked, House members forced to sit in their seats, and the brow-beating, fear-mongering, and threats began in earnest. At about 4:00 am a 63rd vote was secured, the call was lifted and the bill passed.

It also received the minimum votes necessary in the Senate.

The bill raises the state sales tax in Kansas to 6.5%. Some parts of the state will see their sales tax as high as 10% when the state rate is combined with the local rate. The bill also raises cigarette taxes by 50 cents/pack. Kansas will now have one of the highest food sales tax rates in the nation. And 330,000 Kansas businesses still pay no income tax at all.

Collective Bargaining

Collective bargaining for public employees in Kansas is contained in two statutes – the Professional Negotiations Act (PNA) for K-12, community college and technical college professional employees and the Public Employer Employee Relations Act (PEERA) applying to all other public employees including education support personnel in public schools.

There were legislative attacks on both the PNA and PEERA during this legislative session as conservatives sought to severely restrict or even deny collective bargaining rights for public employees.

For the PNA, there were bills to abolish exclusive representation and allow every employee to bargain a contract individually. There were proposals to restrict negotiations to only minimum salaries. But there was also a bill crafted by consensus of KNEA, KASB, USA/KS, and KSSA at the request of the 2013 legislature.

The consensus bill was introduced but ignored by the House Education Committee in favor of a proposal by a minority of the School Efficiency Commission (Dave Trabert, Mike O’Neal, Sam Williams, and Dennis DePew). The same thing happened in the Senate Education Committee where they worked anti-collective bargaining proposals from Senator Jeff Melcher (R-Leawood).

When those proposals hit the floor of each chamber, there was a move to gut them and replace the contents with the education community’s consensus plan. In the House, on a motion by Rep. Sue Boldra (R-Hays), the consensus bill was adopted in its entirety. Over in the Senate, on a motion by Sen. Tom Arpke (R-Salina) with support from Sen. Caryn Tyson (R-Parker) and Sen. Molly Baumgardner (R-Lousiburg), a bill almost identical to that in the House was approved. Both bills were then supported by KNEA, KASB, USA/KS, and KSSA.

There things sat for some time with neither chamber taking up the other’s bill.

Late in the session, the legislature was considering some necessary amendments to Senate Bill 7, the school finance bill passed earlier. These changes were put into HB 2353 and, during debate on the Senate floor, Senator Steve Abrams (R-Arkansas City) amended in the language that the Senate had passed earlier.

HB 2353 was eventually passed by both chambers and so beginning on July 1, 2015 the following changes to the PNA will take effect:

The notice date is changed from Feb. 1 to March 31,

The impasse date is changed from June 1 to July 31,

Each year the parties shall negotiate “compensation of professional employees and hours and amounts of work,”

In addition, “each party may select not more than three additional terms and conditions of professional service from the list” in current law.

“All other terms and conditions of professional service” in the current list “shall be deemed permissive topics for negotiation and shall only be negotiated upon the mutual agreement of the parties,” and

Both parties to the negotiation shall be required to receive training on conducting negotiations.

Senator Melcher’s proposal on PEERA (SB 179) would have essentially ended collective bargaining for state and municipal employees and school district personnel other than teachers. The Senate Commerce Committee coupled SB 179 with SB 212 and rolled them both together into HB 2096.

SB 212 would prohibit public employee organizations from using any money to participate in partisan or political activities and prohibit public employers from using payroll deduction to collect union dues. It was amended such that payroll deduction could not be used for any contribution that was not required as part of an employee benefits program.

When HB 2096 went to the Senate floor, Sen. Garrett Love (R-Montezuma) offered an amendment that would allow all payroll deductions except union dues. Love’s amendment failed and Senate leadership pulled the bill and sent it back to the Ways and Means Committee. That’s where the bill spent the rest of the session. It will be available to legislators in the 2016 session.

Use of Payroll Deduction

Senate Bill 212 which banned the use of payroll deduction for public employee union dues was rolled into HB 2096 and, after a brief floor debate, was sent back to committee where it sat for the remainder of the session. It will be available to legislators in the 2016 session. (See our write-up on collective bargaining to learn more about what happened to SB 212.)

School Finance

Yes, the legislature repealed the school finance formula that has been in place since 1992.

Why was this done? Well, one can only speculate on the rationale. Here are a few reasons that have been floated under the dome:

The 1992 formula is too complicated for legislators to understand (although SB 7, the block grant replacement, is equally complicated).

Many legislators believed that if the 1992 formula went away, so would the Gannon lawsuit. The thinking is that the lawsuit is over the 1992 formula and that’s gone so the lawsuit can’t continue.

A large percentage of legislators don’t support public education and this was a way out of giving any consideration for additional funding.

But whatever the rationale is, the 1992 formula is gone and has been replaced by a “block grant” proposal under which school districts for three years will get an amount of dollars roughly equal to what they got before it started. But the plain truth is that most school districts are getting less.

We are now waiting to see what the court has to say about this move. Some people believe they will stay SB 7 and keep the old formula in place until the dust settles on the lawsuit. Only time will tell.

The block grant has a number of serious flaws. Probably the most important is that it does not adjust for any enrollment changes from increases in enrollment to increased poverty, increases in ELL students, etc. With funding frozen for three years, we are certain to see some seriously negative consequences in the future.

KPERS Working After Retirement

The Legislature agreed on a bill amending the working after retirement rules governing KPERS retirees who return to work in a KPERS-covered position.

Changes adopted include:

Raising the earnings cap to $25,000,

Enacting restrictions on who can work after retirement in the schools.

Hiring retirees to work in KPERS covered professional positions will be allowed in special education and up to five areas identified as shortage areas by the State Board of Education and allow for special “hardship” positions identified by school districts that have tried to find new employees but cannot.

Current retirees working after retirement are grandfathered until 2017 when all retirees will be under the new rules.

The changes were in reaction to information that KPERS was taking a loss for every retiree between the ages of 55 and 62 who returns to work and that pre-arranged agreements jeopardized the tax status of KPERS. There was no appetite to simply lift the sunset on current rules and extend them.

The effect of the King amendment is to bring the bill back to a much earlier form but include some amendments that had been adopted previously and send it off to conference.

King argued that the big floor debate has been held and now it’s time to let the conference committee cobble together an agreement to bring forth for a vote by both chambers.

Senator Hensley who had argued strongly that such a debate was needed and necessary indicated that he would support this amendment provided that the Senate conferees would also carry other Senate positions that had been approved on the floor, particularly the sales tax positions.

The King amendment would keep the sales tax at 6.15% for all purchases.

Far right conservatives continued their opposition to sending such a bill to conference. They want assurance that there will be no report coming forward that would reinstate income taxes on the 330,000 businesses now exempt. Senator Melcher likened this bill to the Trabant – the notoriously unreliable East German automobile.

It became clear the no promises were being made at this time on any of those points which caused Hensley to rethink his support of the amendment.

The amendment was ultimately adopted on a roll call vote of 21-17, the bare majority.

Senator Francisco (D-Lawrence) then offered an amendment to lower the food sales tax rate to 5.7% beginning on January 1. This would be consistent with amendments adopted by the Senate in earlier debates. Hensley pointed out that the last Senate position on sales taxes was 5.7% on food and 5.95% on everything else.

The Francisco amendment was adopted on a vote of 24 to 11.

At this point, King noted that adoption of the Francisco amendment set up a technical conflict elsewhere in the bill that would require an additional amendment. Since it would take several hours to have the technical fix drawn up as an amendment, the Senate chose to rise and report progress, adjourning until today at 10:00.

If adopted today, this tax bill would produce about $30 million in additional revenue – only $370 million more until the budget is balanced!

An earlier amendment by Senator LaTurner (R-Pittsburg) that was adopted on a vote of 30 to 8 would prohibit increases in property tax collections to exceed inflation without a vote of the people is also in the bill as it stands now. Coupled with state cuts, this could have a devastating effect on local units of government.

Budget bills down to two

Yesterday we reported that the budget conference committee was planning to put out three bills – one, the budget as it has already been proposed (needing $400 million), another just like it but with a 2% cut to a few agencies (not education), and a third with a 6% cut across the board (including education).

The committee got back together in the afternoon and Senator Masterson (R-Andover) withdrew the proposal with the 2% cut meaning that there are now two budget bills up for consideration.

SB 112, which goes to the House, is the budget as it was originally proposed that needs $400 million in additional revenue to balance, and

HB 2135, which goes to the Senate, which has a 5.7% across the board cut that will balance the budget but provide for no ending balance.

A 5.7% cut to education would be about $181 million. KASB calculates this to be an average cut of $369/pupil.

PNA bill to the Governor

The conference committee report on HB 2353 was adopted by the House yesterday. This action sends it to the Governor for his signature.

The bill makes some technical clean-ups to SB 7, the block grant bill, and enacts changes to the Professional Negotiations Act that are in line with the KNEA, KASB, KSSA, USA/KS consensus agreement.

The changes move the notice and impasse dates to later in the year, maintain the current list of negotiable items, mandate that salaries and hours are negotiated every year and that each side may choose up to three items from the list that must be negotiated. All other items may be negotiated by mutual agreement.

Freezing the income tax rates through tax year 2017, dropping them to 2.0/4.1% in 2018 and 2019; and 1.9/3.8% in tax year 2020.

Raising the threshold under which one would owe no income taxes (governor’s proposal)

Repeal the remaining food sales tax exemption.

Raise sales tax on everything to 6.5% on July 1; drop the sales tax on food to 6.0% on Jan. 1.

The tax amnesty program.

Increase cigarette tax by $0.50/pack.

Tax e-cigarettes at $0.20/ml.

Assume the MCO fee increase.

Senator Anthony Hensley (D-Topeka) asked that the amendment be divided into three parts. Part A would be raising the threshold under which one would owe no income taxes (governor’s proposal); part B would be the sales tax provisions; part C would contain the remainder of the amendments.

Part A, exempting some of the lowest income Kansans from paying income taxes, passed on a vote of 33 to 4 with only Abrams, Donovan, Ostmeyer, and Smith voting NO. Francisco did not vote; Arpke and Wilborn were absent.

The next vote was on the sales tax increases. The tax increases failed on a vote of 8 to 30 with only Donovan, Holmes, Kerschen, King, Longbine, Olson, Powell, and Wagle voting YES.

The third part, which was everything else in the above list was voted down on a voice vote.

The Senate then adjourned for the day to return today at 10:00 am.

Senate again adopts HB 2353

Earlier both the House and Senate had adopted HB 2353, the bill containing clean-up fixes to the block grant bill, SB 7, and the education community’s PNA consensus bill.

It was discovered later that there was an error in the drafting of the bill that had to be fixed so both chambers brought the bill back up and formed a conference committee to fix the error. This was accomplished during a meeting at the rail. No changes were made to the PNA provisions.

Yesterday the Senate adopted the conference committee report. Now it only needs to be adopted by the House.

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Today the House approved HB 2104, the bill moving local elections including school board elections to November of odd numbered years. The elections would remain non-partisan.

The bill originated as an attempt to put local elections on the same calendar as state and federal elections – November of even numbered years – and to make those races partisan. Candidates for city commissions, school boards and other local offices would have had to file by party and participate in the August primary elections. Senator Mitch Holmes (R-St. John), when announcing the bill early in the session, indicated that it would be a way to wrest power away from the KNEA. Holmes believes that teachers voting in low turn-out races means the union controls the school board. This argument was raised on the House floor today by Rep. Kiegerl (R-Olathe).

The bill now goes to the Governor.

Senate Works School Bill, Attaches PNA Changes

The Senate today debated Senate Sub for HB 2353, a bill that provides for some clean-up of issues in the block grant bill, SB 7.

Clean-up language was needed for some issues over virtual schools (out-of-state students were being funded) as well as changes to a few other funds.

An amendment was offered by Senator Abrams (R-Arkansas City) that would put changes to the professional negotiations act into the bill. Abrams moved to add the bill passed earlier by the Senate that reflects the agreement reached by KNEA, KASB, USA/KS, and KSSA. Under this provision, beginning next year associations and school boards would bargain salaries and hours every year and each side would be able to pick up to three additional items from the current list of negotiable items. All other items could be negotiated by mutual agreement.

The amendment also changes the notice date to March 31 and the impasse date to July 31.

KNEA supports the amendment and the bill. It now goes to the House for a vote to concur or non-concur. The House may not amend the bill further.

Budget Negotiations Ongoing

The budget conference committee (House Appropriations and Senate Ways and Means) continues to meet and will be doing so late today.

At an earlier meeting today, the stalemate over funding the gap in the 20 mill property tax levy for schools (see yesterday’s report) may have broken. The new plan is to fund the $17.5 million for FY 2016 and wait to decide on the $13 million for FY 2017 until new revenue numbers come in.

Tax Bill Pulled in Senate

Senate Sub forHB 2109, the tax bill that came out of the Senate Tax Committee and was based on a proposal from Senator Donovan (R-Wichita), had been scheduled for debate today but was pulled at the last minute by leadership. There could be many reasons for this; perhaps there were not enough votes to pass it, perhaps amendments were being drawn up. Word is the bill will be back on the calendar for debate next Wednesday.

The House Tax Committee is expected to continue work next Tuesday in an attempt to craft a bill for their chamber to consider.

Four Day Weekend

Both chambers have adjourned for the holiday weekend and will be returning to Topeka on Tuesday of next week. They won’t be paid for those days for those of you following the overtime spending.

This would be a great weekend to connect with your legislators and urge them to get moving on resolving the state’s revenue crisis and funding our schools.